Business Law I Exam Prep PDF

Exam Preparation Business Law I Lecture 1: Introduction: Swedish legal system, courts, private and public law. Sustainability and law. Reading: Chapters 1 - 4 Questions: What is "law"? - A body of rules (commands aimed at regulating behavior), - Created by the state (nationa...

Exam Preparation Business Law I Lecture 1: Introduction: Swedish legal system, courts, private and public law. Sustainability and law. Reading: Chapters 1 - 4 Questions: What is "law"? - A body of rules (commands aimed at regulating behavior), - Created by the state (national parliaments courts), - Binding within its jurisdiction (law of any state is only binding within its territory) - And Enforced with the authority of the state through the use of sanctions. State enforcement of the law: A legal rule is a social norm whose enforcement is guaranteed by the state. In case of a breach of a legal rule, the state will provide a sanction, or at least the possibility of a sanction. What are the different branches of the law? - Same facts can trigger liability for breach of private and criminal law. An example is food poisoning caused by the insanitary conditions in a restaurant. Criminal and private (civil) proceedings will have different views. Criminal: selling impure food is a criminal offence. Civil: action for breach of contract, action in delict/tort (compensation). - Criminal and private law also has different burden of proof. Criminal proceedings: Beyond all reasonable doubt. Civil: On the balance of probabilities - Public law has a vertical nature while private law has a horizontal nature (company A vs company B, you vs me). Property = what do I own. Obligations = what am I owed. What follows from the Constitution being part of ”public law”? The constitution being part of public law means that it is the supreme law and establishes the framework for the government and the legal system. It therefore applies to all levels of government and to all citizens. The constitution is also widely available and can be accessed by anyone. What are the main features of any constitution? 1. Supremacy – Highest law of the land. 2. Limited government – Prevents the abuse of power by limiting the power of the government. 3. Separation of powers – Divides the government’s power among different branches (legislative, executive and judicial branches). 4. Bill of rights – List of individual rights that the government is bound to protect and respect. 5. Rule of law – The government must follow the law. 6. Popular sovereignty – People are the source of the government’s authority, provisions for elections. 7. Amendment process – Provisions for how the constitution can be changed.  What are the main features of the Swedish Constitution? 1. Instrument of Government – Fundamental law of Sweden. Four parts: Riksdagen, Prime minister and government, the King and the courts. 2. Freedom of the Press Act – right to freely disseminate information, opinions and other communications through media, radio and television. 3. Fundamental Law on the Freedom of Expression – right to freedom of expression and freedom of the press. 4. Act of Succession – law for who can inherit the Swedish throne. Rights on individuals and companies that can be enforced against the state. (Part of public law). The state is always a party in the public law (state vs. xx). What are the main differences between Constitutional acts and ordinary acts? Constitutional acts form the basis of a country’s constitutional order and govern the fundamental principles and structure of the government. Highest laws of the country. Ordinary acts are laws that are passed by the government or parliament to regulate specific areas of policy and to address specific issues. Can be changed more easily than constitutional acts. Some countries, eg Germany Links to an external site., Austria Links to an external site., Spain, Portugal and Italy, have specialized courts of constitutional review (constituional courts/tribunals). Why does Sweden not have a constitutional court? Sweden does not have a constitutional court the constitution does not provide for the establishment of such a court. Instead, Sweden has several mechanisms to ensure that laws are consistent with the constitution, such as the Riksdag (Committee on the Constitution – responsible for reviewing laws and constitutional issues) and the Swedish Supreme Court (has authority to review laws and declare them to be invalid if they are in conflict with the constitution). The existence of a constitutional court depends on the specific provisions of a country's constitution and the legal and political system in place. Some countries have a constitutional court as a way of protecting the rule of law and the fundamental principles and rights established by the constitution, while others rely on other mechanisms to ensure that laws and governmental actions are consistent with the constitution. Courts in Sweden: 1. Ordinary courts of justice (public law) – criminal and civil jurisdiction. 2. Specialized jurisdictions (civil law) – Patent and market court, land and environmental court and migration court.  3. Labor court 4. General administrative courts What are the main courts in Europe? What is the "Strasbourg court" and the "Luxemburg court"? Court of Justice of the European Union (ECJ): The highest court of the European Union. Based in Luxemburg. Interprets EU law and ensures that EU institutions and member states adhere to EU law. In case of a conflict between EU and national law, EU law prevails. → Luxemburg Court European Court of Human Rights (ECtHR): Regional court established by the Council of Europe (Human rights organization with 47 member states). Based in Strasbourg. Hear cases involving human rights violations in Council of Europe member states. → Strasbourg court. What is the Riksdags Act? A Swedish law that establishes the organization and powers of the Riksdag. Sets out the procedures for how the Riksdag operates (how laws are passed and how the members are elected). What are Ordinances and statutory instruments in Swedish law? Types of legislation that are issued by the government or other authorities to implement or supplement laws passed by the Riksdag. Ordinances are legal instruments issued by the government or other authorities that have the force of law. Used to implement laws passed by the Riksdag. May be issued by the government, by individual ministers, or by other authorities, such as municipalities or county councils. Statutory instruments are legal instruments issued by the government or other authorities that have the force of law and that implement or supplement EU law in Sweden. Used to transpose EU directives into national law or to implement other EU legal acts, such as regulations or decisions. What is the rationale for the hierarchy of courts? (A) The hierachy of courts refers to the system of courts in a country that is organized according to levels of authority or jurisdiction. Used to: - Ensure the consistency and predictability of the law – each level having a specific sphere of authority will lead to similar cases being treated in a similar manner. - Promoting the efficient and effective administration of justice – cases are heard by the court that is most suited to address the issues involved. - Providing a means for reviewing and correcting errors – higher courts corrects errors made by lower courts. - Ensuring the independence of the judiciary – each level of the hierarchy is accountable to a higher level of authority. What is the rationale for the hierarchy of norms? (B) A concept that suggest that there is a certain order or ranking to different types of laws and norms, in order to ensure that they are applied consistently and fairly, and to protect the fundamental values and principles that are central to that society. - Helps to ensure that the most important laws and principles are given priority and are more difficult to change. Provides stability and predictability. - Allows for flexibility and adaptability within a legal system. Different levels of the hierarchy may have different levels of authority and may be more or less subject to change, depending on their importance and the specific circumstances. This can help to ensure that the legal system is able to respond to changing circumstances and needs, while still preserving its fundamental principles and values. What do (A) and (B) have in common?  Both involve the idea of creating an organized system that is able to function effectively and efficiently, while also protecting the fundamental principles and values of the legal system or society in question. What is the relationship between the national courts and the Court of Justice of the European Union? What are the key features of this relationship? (see below) The key feature of the relationship between the national courts and the Court of Justice of the EU (ECJ) is the so-called preliminary reference procedure laid down in Article 267 TFEU. Relationship: 1. EU law can have direct effect - EU law can and often does confer rights on individuals/companies, as well as impose obligations on individuals/companies. 2. EU law is enforceable in the national courts - a right conferred under EU law can be enforced in the national court, an obligation imposed by EU law can be enforced in the national court (eg any Swedish court). 3. Supremacy of EU law – if there is a conflict between a rule of EU law and a rule of Swedish law, the EU rule prevails. What is the status of the European Convention for the Protection of Human Rights and Fundamental Freedoms (ECH R)in Sweden? Sweden is a party to the ECHR and has ratified the treaty, which means that it is legally bound by the provisions of the ECHR and is required to respect, protect, and fulfill the human rights of its citizens and others within its jurisdiction in accordance with the treaty. The ECHR is an important part of the legal framework in Sweden and is used to protect the rights of individuals in a variety of different contexts, including cases involving civil and political rights, as well as social, economic, and cultural rights. What is the dualistic model? The dualistic model is a system for the incorporation of international law into the domestic legal systems of countries that follow this model. Under the dualistic model, international law is treated as a separate and distinct legal system from domestic law, and international treaties and conventions that a country has ratified are not automatically incorporated into domestic law. Instead, they must be "transformed" or "incorporated" into domestic law through specific domestic legislation, such as an act of parliament, before they can be applied and enforced within the country. Many countries follow the dualistic model, including the United Kingdom, Sweden, and Canada. When can a party get full review of her case in the Supreme Court? A party to a case may be able to seek a full review of their case by the Supreme Court if they believe that their case raises an important legal question or if there is a conflict between the decisions of different lower courts on a similar issue. What is meant by "precedence for guidance"? To what extent does this concept differ from precedents in the common law? A legal principle under which judges in a court of law may look to past decisions made in similar cases for guidance in deciding the case at hand. Based on the idea that prior decisions made by higher courts or by courts in the same jurisdiction can be useful in helping to resolve similar legal issues that arise in future cases. In common law systems, precedent plays a central role in the interpretation and application of the law. Common law courts are generally required to follow the decisions of higher courts or courts in the same jurisdiction in similar cases. This means that the decisions of higher courts become binding precedent that must be followed by lower courts in the same jurisdiction. The concept of precedent for guidance is similar to the concept of persuasive precedent in common law systems. Persuasive precedent refers to past decisions that are not legally binding, but may be cited by courts as guidance or support in deciding a case. Persuasive precedent can come from a variety of sources, including decisions made by courts in other jurisdictions, decisions made by lower courts within the same jurisdiction, and decisions made by expert tribunals or other specialized bodies.  In common law systems, persuasive precedent is considered to be less influential than binding precedent, but it may still be taken into account by courts in their decision-making process. What are they main characteristics of arbitration? Arbitration is a form of alternative dispute resolution (ADR) in which the parties to a dispute agree to submit their dispute to one or more neutral third parties (arbitrators) for a final and binding decision, rather than resolving the dispute through the judicial system. Requires an arbitration agreement in the contract. Some of the main characteristics of arbitration are: - Voluntary: Arbitration is a voluntary process, which means that the parties must agree to participate in arbitration in order to resolve their dispute. - Confidential: Arbitration is generally a confidential process, which means that the proceedings and the final decision of the arbitrators are not open to the public. If agreed by the parties. - Final and binding: The decision of the arbitrators is final and binding, which means that the parties are required to accept and comply with the decision, unless it is overturned on appeal. An arbitral tribunal decides. - Flexible: Arbitration is a flexible process, which means that the parties can tailor the procedures and rules of the arbitration to suit their specific needs and preferences. - Efficient: Arbitration is often considered to be a more efficient and cost-effective way to resolve disputes compared to litigation, as it allows the parties to avoid the time and expense of going to court. How does the law promote sustainability? Discuss three examples. The ability to meet the needs of the present without compromising the ability of future generations to meet their own needs. 1. Climate change legislation and litigation 2. Supply chains (consequences for companies who breaches fundamental human rights and environmental standards in supply chains) 3. US Federal Jurisdiction in special cases (US federal courts are open for civil actions brought by foreign nationals for a tort in violation of international law (international human rights and environmental crimes)). Other ways law promotes sustainability: 1. Environmental laws: To regulate activities that impact the environment. 2. Corporate social responsibility goals: Companies can be required by law to adopt corporate social responsibility (CSR) policies that promote sustainability, such as by reducing their carbon emissions. 3. Sustainable development goals: Governments and other organizations can adopt sustainable development goals (SDGs) that set out specific targets and indicators for promoting sustainable development. These goals can be incorporated into law and used to guide policy decisions and actions. 4. Climate change laws: Governments can pass laws to address climate change, such as by establishing emissions targets or by providing incentives for the development and use of renewable energy sources. 5. Consumer protection laws: Governments can pass laws that protect consumers from products and services that may be harmful to the environment or that do not meet certain sustainability standards. Vocabulary: ne bis in idem – “Not twice for the same thing”. The double jeopardy principle. Protects someone having to go through the same ordeal (same prosecution) twice in criminal court. The principle is based on the idea that an individual should not be subjected to the stress and expense of multiple criminal proceedings for the same offense and that a final judgment should be conclusive and binding. (Does not apply to civil cases, only for criminal proceedings).  lex superior derogat legi inferiori – “The higher law derogates the lower law.” If there is a conflict between two laws, the higher law takes precedence and the lower law is no longer applicable. lex posterior derogat legi priori – ”The later law derogates the earlier law”. If there is a conflict between two laws, the later law takes precedence and the earlier law is no longer applicable. Ensures that the law remains up- to-date and relevant, and that it reflects the changing needs and values of society. lex specialis derogat legi generali – ”The special law derogates the general law”. If there is a conflict between a specific law and a general law, the specific law takes precedence and the general law is no longer applicable. ratio decidendi – ”The reason for the decision”. The ratio decidendi of a case is the key legal issue or question that the court was required to decide, and the reasoning and analysis that the court used to reach its decision. In many legal systems, the ratio decidendi of a case is considered to be binding precedent, which means that it must be followed by lower courts in the same jurisdiction in similar cases. obiter dictum – ”Said in passing”. It refers to statements made by a court in a case that are not necessary to the decision of the case and are not considered to be binding precedent. Obiter dicta are statements made by a court that provide additional information or analysis on a point of law, but are not considered to be part of the ratio decidendi, or the legal reasoning that forms the basis for the court's decision. Obiter dicta are not considered to be binding precedent, which means that they are not required to be followed by lower courts in the same jurisdiction in similar cases. the special role of precedent in Swedish law - In Sweden, the decisions of the Supreme Court are considered to be particularly important and are given significant weight as precedent. The Supreme Court is the highest court of appeal in Sweden and has the final say on cases that have been appealed from lower courts. The decisions of the Supreme Court are considered to be binding precedent for all lower courts in Sweden and are often cited as persuasive precedent in other jurisdictions. Precedent plays a crucial role in the legal system in Sweden, as it helps to ensure consistency and predictability in the law and helps to ensure that legal issues are resolved in a fair and transparent manner. It also helps to ensure that the law evolves and adapts to changing circumstances and needs, as the decisions of higher courts can shape the development of the law and provide guidance to lower courts on how to apply the law in new and emerging situations. the special features of the Swedish court system – Includes: - Three-tiered court system: district courts, courts of appeal and the Supreme Court. - Lay judges: Non-lawyers who are appointed to serve on the bench alongside professional judges and play an important role in the administration of justice in Sweden. - Public access – Court proceedings are open to the public. - Mediation - The Swedish court system encourages the use of alternative dispute resolution (ADR) techniques, such as mediation, to resolve disputes out of court. Mediation is a voluntary and confidential process in which a neutral third party helps the parties to a dispute to reach a mutually satisfactory resolution. - Legal aid - The Swedish court system provides legal aid to individuals who are unable to afford to pay for legal representation. burden of proof in civil cases/ criminal cases – Criminal: Beyond all reasonable doubt. Civil: On the balance of probabilities. (Easier to be claimant in criminal proceedings, since it is more difficult to prove guilty) Alien Tort Claims Act (ATCA) - a federal law of the United States that allows individuals who are not US citizens to bring civil lawsuits in US courts for injuries or harm that they have suffered as a result of violations of international law. Supply Chain Liability - the legal responsibility of companies for the actions of their suppliers and other partners in the supply chain. Companies that are part of a supply chain may be held liable for the actions of their suppliers or other partners if those actions result in harm or damage to third parties. Supply chain liability is an important area of law because it allows companies to be held accountable for the actions of their partners in the supply chain, and it helps to ensure that companies are not able to profit from or benefit from illegal or unethical activities. It also helps to promote accountability and transparency in the supply chain and can encourage companies to adopt responsible and sustainable business practices. Other: Delict: Civil liability within the civil law system. A civil wrong that is committed by one person or entity against another, resulting in harm or injury.  Tort: Civil liability within the common law (UK). Action that can be addressed in a civil court rather than a criminal court. A person harmed seeks damages (compensation) from the person or entity that caused the damage. Unjust enrichment: When party A confers a benefit upon party B without party A receiving. Occurs in a contractual agreement when party A fulfills his/her part of the agreement and party B does not fulfill his/her part of the agreement. Constitutional court: A specialized court that has the authority to interpret and apply a county’s constitution. Serves as a safeguard against the abuse of power by the government and help to ensure that the rights and freedoms of citizens are respected. Preliminary reference, Article 267 TFEU (Treaty on the Functioning of the European Union): Establishes the procedure for preliminary references, which allows national courts to ask the European Court of Justice for guidance on the interpretation or validity of EU law. Ensures uniformity of Eu law throughout the member states. The highest ranking of national law is under the lowest ranking of the EU law, if there would ever be a discrepancy. Litigation: Litigation is the process of resolving legal disputes through the judicial system. It involves the parties to a dispute bringing their case before a court, which hears and decides the case according to the law. Lecture 2: Civil Law and Common Law, EU-Law Reading: Chapters 1.7, 2.3 and 13.1 Common law: https://www.bbc.co.uk/sounds/play/p03m0hx6 Civil law: https://www.bbc.co.uk/programmes/p03m0hxr Questions: What are the main characteristics of the Civil law? The civil law is a legal system that is based on a comprehensive and written legal code that sets out the rules and principles that govern private law. The main characteristics of the civil law include: - Written legal code: a comprehensive and systematic set of laws that cover all areas of private law. The legal code is the primary source of law in the civil law system and is used as a reference by courts and legal practitioners when interpreting and applying the law. French code civil and Bürgerliches Gesetzbuch. - Codifications: the process of collecting, organizing, and systematizing the law into a written legal code. Codification helps to ensure that the law is clear, consistent, and accessible, and it makes it easier for courts and legal practitioners to apply the law in a uniform and predictable manner. - Legislative supremacy: the law is created and amended by the legislative branch of government, rather than being developed through the common law process of judicial precedent. This means that the law is more predictable and consistent in the civil law system, as it is not subject to the same degree of variation and change as in the common law system. - Formalism: based on written rules and procedures and places a strong emphasis on procedure and form. This can make the civil law system seem more rigid and formal than the common law system, which is more flexible and adaptable. - Rationality: based on the idea of rationality and is intended to be logical, systematic, and objective. This means that the law is based on abstract principles and logical reasoning, rather than on the specific facts and circumstances of a particular case. - Influences from Roman Law (reception of the Corpus Iuris Civilis and Ius commune of Europe) - The judge is the “mouth of the law” – Le juge, bouche de la loi. This phrase captures the idea that the judge is responsible for interpreting and applying the law in a particular case, and for giving voice to the law in the context of that case. - Law in Germany, France, Italy, Japan, Thailand, Spain and Portugal.  What are the main characteristics of the common law? The common law is a legal system that is based on the principle of judicial precedent, which means that the law is developed through the decisions of courts in individual cases. The main characteristics of the common law include: - Judicial precedent: the decisions of higher courts are binding on lower courts in the same jurisdiction. This means that the law is developed and shaped through the decisions of courts in individual cases, and that these decisions are used as guidance in future cases with similar facts and legal issues. - Case-by-case development: The law is developed through the resolution of specific legal disputes and is not codified in a comprehensive legal code. This means that the law is more flexible and adaptable in the common law system - Flexibility: flexibility and ability to adapt to changing circumstances and needs. This is because the law is developed through the resolution of specific legal disputes and is not bound by a written legal code. - Emphasis on facts: strong emphasis on the specific facts and circumstances of a particular case, and decisions are often based on the specific facts and legal issues involved in the case. This means that the law is more fact- specific in the common law system, as opposed to being based on abstract principles or logical reasoning. - Role of judges: Judges play an important role in the common law system, as they are responsible for interpreting and applying the law to the facts of a particular case, and their decisions are used as precedent in future cases. - Unified law of England: Uniform set of rules applied by the King’s courts in all of England. Law applied by the royal judges became the law of the land. - Common law and equity: Chancellor “keeper of the King’s conscience” decided the petitions to the king. - Law of the English-speaking world (North America, UK, Australia). - Developed by judges. - Statutory law (acts of the UK parliament) - Delegated legislation What are the crucial differences between the Civil law and the common law? - Source of law: Civil law is based on a written legal code while the common law is based on the principle of judicial precedent. The law is developed and shaped through the decisions of courts in the common law system, while the law is codified and collected in a written legal code in the civil law system. - Codification: Civil law is characterized by codification (collecting, organizing and systematizing the law into a written legal code). Common law is developed through the resolution of specific legal disputes. - Legislative supremacy: Civil laws are created and amended by the legislative branch of government. The common law is not subject to the same legislative control, and is therefore developed through the decisions of courts in individual cases. - Formalism: The civil law is much more formalized with a strong emphasis on procedure and form. The common law places a greater emphasis on specific facts and circumstances of a particular case. - Rationality: The civil law is much more rational, while the common law is more fact specific. Why is the study of EU law so important—particularly to future top managers? The study of EU law is important for future top managers because it can help them to better understand the legal and regulatory environment in which they will be operating, and to make informed and strategic decisions about their businesses. - Impact on business: Understanding EU law is important for businesses operating within the EU, as it can help them to navigate the legal and regulatory landscape and to make informed decisions about their operations.  - International trade: Understanding EU law can help businesses to better understand the rules and regulations that govern trade with the EU and to identify opportunities for international expansion. - Economic integration: The EU is a major force for economic integration and cooperation in Europe and understanding EU law is important for businesses seeking to take advantage of the opportunities created by this integration. - Regulatory compliance: Understanding EU law can help businesses to ensure that they are in compliance with the law and to avoid legal and regulatory risks. What are the requirements of contract formation in the common law? The requirements are intended to ensure that contracts are entered into voluntarily and with the intention to create a legally binding agreement. To help ensure predictability and enforceability and the protection of the rights and interests of the parties involved. - Offer: Proposal by one party to enter into a contract with another party. The offer must be clear and definite and communicated to the offeree to be valid. - Acceptance: The acceptance of an offer by the offeree. Must be unconditional and communicated to the offeror to be valid. - Intent to create a legally binding agreement: The parties must have the intention to create a legally binding agreement in order for a contract to be enforceable. - Consideration: A legal exchange of value between the parties. Each party must receive something in value in exchange for their promise. Explain the doctrine of precedent—stare decisis; ”To stand by things decided”. A principle of the common law legal system that requires courts to follow the decisions of higher courts in cases with similar facts and legal issues. This means that the decisions of higher courts are binding on lower courts within the same jurisdiction, and must be followed in future cases with similar facts and legal issues. The doctrine of precedent is based on the idea that the law should be consistent and predictable, and that similar cases should be treated in a similar manner. The doctrine of precedent also allows for the development and evolution of the law over time, as the decisions of higher courts can be used as guidance and precedent in future cases. This means that the law can adapt and change in response to changing circumstances and needs, while still maintaining a degree of consistency and predictability. Explain ratio decidendi and obiter dicta—what is the difference? Ratio decidendi: ”Reason for deciding”. In a legal decision, the ratio decidendi is the central and most important part of the decision, as it sets out the legal reasoning that underlies the court's decision. The ratio decidendi is based on the facts of the case, the relevant law, and the legal principles that are applicable to the case. The ratio decidendi is binding on lower courts in the same jurisdiction and must be followed in future cases with similar facts and legal issues. Obiter dicta: “Something said by the way”. Obiter dicta are statements or opinions that are made in the course of a legal decision, but which are not necessary for the court to reach its decision. They are not part of the ratio decidendi, which is the legal principle or reasoning that is applied by the court in reaching its decision. Obiter dicta are an important part of legal decisions, as they provide insight into the thinking and reasoning of the court.While obiter dicta may be persuasive and may be considered by courts in future cases, they are not binding and do not have the same precedential value as the ratio decidendi.  What are the sources of EU law? The sources of EU law are the various legal materials and instruments that form the legal framework of the European Union (EU): - Primary law - Secondary law - Case law of the Court of Justice What is primary EU law? Written sources: - Contains treaties that set out the legal framework and principles that govern the EU. The most important treaty is the Treaty on the European Union (TEU), which establishes the EU’s legal and institutional framework, as well as its objectives and powers. Treaty on the Functioning of the European Union (TFEU) sets out the EU's powers and competencies (lays out the specific areas in which the EU has the authority to legislate and act). - Protocols - Charter of fundamental rights (CFR): a document that sets out the fundamental rights and freedoms that are guaranteed to individuals within the European Union. Unwritten sources: - General principles of EU law: the fundamental principles that are recognized by the legal systems of the European Union (EU) member states and form part of the EU legal order. What is secondary EU law? The laws and regulations that are adopted by the European Union (EU) institutions to implement the provisions of the primary EU law treaties and achieve the objectives of the EU. Secondary EU law is an important source of EU law and is legally binding on the EU institutions and the member states. Used to regulate a wide range of policy areas within the EU. - Regulations: Binding acts of the Eu that are applicable in all member states and take direct effect without the need for national implementation. - Directives: Binding acts of the EU that are addressed to the member states and require the member states to achieve a certain result,but leave it up to the member states to decide how to achieve that result. - Decisions: Binding acts of the EU that are addressed to specific individuals or entities, such as companies and individuals, and are directly applicable to them. What are the differences between primary and secondary EU law? Primary EU law is the legal foundation of the EU and establishes its legal and institutional framework, while secondary EU law is derived from the primary EU law treaties and is used to implement the provisions of the primary EU law treaties. - Hierarchy: Primary EU law is at the top of the hierarchy of EU law, as it establishes the legal and institutional framework of the EU and sets out its objectives and powers. Secondary EU law is derived from the primary EU law treaties and must be consistent with them. - Legal status: Primary EU law has a higher legal status than secondary EU law, as it is the legal foundation of the EU and takes precedence over secondary EU law. - Scope: Primary EU law has a broader scope than secondary EU law, as it establishes the legal and institutional framework of the EU and sets out its objectives and powers. Secondary EU law is more specific and focuses on the implementation of the provisions of the primary EU law treaties. - Binding effect: Primary EU law is legally binding on the EU institutions and the member states, while secondary EU law is legally binding on the EU institutions and the member states, as well as individuals and companies within the EU.  Why is the distinction between primary and secondary EU law needed? The distinction between primary and secondary EU law is important because it reflects the hierarchical structure of the EU legal system and ensures that secondary EU law is consistent with and derives its authority from the primary EU law treaties. It also reflects the different legal status and binding effect of these two sources of EU law, with primary EU law having a higher legal status and a broader scope, and secondary EU law being more specific and focused on the implementation of the primary EU law treaties. Which important principles of EU law emerged from the case law of the Court of Justice of the European Union? These principles are an important part of the EU's legal and political framework and are used to ensure that EU law and action are consistent, transparent, and predictable. - Principle of Direct effect - Supremacy - State liability in damages: The liability of an EU member state for damages that are caused by its failure to fulfill its obligations under EU law. This liability can arise when an EU member state fails to implement EU law correctly, or when it takes action that is incompatible with EU law. (- Principle of indirect effect: This principle allows individuals to rely on provisions of EU law that are not directly effective and to use them to challenge national measures that are incompatible with EU law.) (- Principle of proportionality: Any EU action or measure must be necessary and appropriate to achieve the stated objectives, and must not go beyond what is necessary to achieve those objectives.) (- Principle of non-discrimination: This principle prohibits discrimination on grounds such as race, ethnicity, religion, age, gender, sexual orientation, or disability.) EU law: explain the principle of conferral; States that the EU is a union of member states and that it is founded on the Treaties that have been voluntarily concluded by those member states. This means that the EU can only act within the limits of the powers that have been conferred upon it by the member states in the Treaties. The principle of conferral is designed to ensure that the EU does not exceed the powers that have been granted to it by the member states, and that it does not interfere in areas that are the exclusive competence of the member states. EU law: explain the prinicple of direct effect; The principle of direct effect is a principle of European Union (EU) law that allows individuals to rely on certain provisions of EU law and to invoke them before national courts in order to protect their rights. This means that individuals can use certain provisions of EU law as a basis for a legal claim, even if those provisions are not directly incorporated into national law. EU law: explain the principle of supremacy of EU law; The principle of supremacy of EU law is a fundamental principle of European Union (EU) law that states that EU law takes precedence over the national laws of the member states. This means that if there is a conflict between EU law and the national law of a member state, EU law will prevail and the national law must be set aside. The principle of supremacy is based on the idea that the member states have voluntarily conferred certain powers on the EU, and that EU law must be given effect in all member states. It is necessary to ensure that EU law is applied consistently across the EU and that it is not undermined by conflicting national laws. What is the EU internal market? The European Union's (EU) internal market is a single market that comprises the 27 EU member states. It is based on the free movement of goods, persons, services, and capital within the EU. This means that there are no barriers to trade or movement within the internal market, and that individuals and companies can freely do business and provide services across the EU. The internal market is one of the key pillars of the EU and is  designed to increase economic growth and competitiveness, create jobs, and improve the standard of living for EU citizens. Four freedoms: 1. The Free Movement of Goods 2. Free Movement of People 3. Freedom of Services 4. Freedom of Movement of Capital Other: Curia Regis: “The king’s court”. The highest court in the English legal system in the Middle Ages. It was a royal court that was responsible for the administration of justice in England and Wales, and was presided over by the king or his judges. The curia regis was an itinerant court, meaning that it traveled throughout the country and held sessions in different locations. It was made up of the king and his judges, who were appointed by the king and were responsible for interpreting the law and rendering judgments in cases before the court. In dubio pro reo: “In doubt, for the accused”. If in doubt, favor the defendant. a principle of criminal law that is based on the idea that the burden of proof in criminal cases lies with the prosecution, and that a person accused of a crime should not be convicted unless the prosecution can prove their guilt beyond a reasonable doubt.The principle of "in dubio pro reo" is designed to protect the rights of the accused and to ensure that they are not convicted on the basis of insufficient evidence. It is based on the idea that it is better for a guilty person to go free than for an innocent person to be wrongly convicted. Corpus Iuris Civilis: Corpus Iuris Civilis (Corpus of Civil Law) is a collection of legal texts compiled under the direction of the Byzantine Emperor Justinian I in the 6th century AD. It is a comprehensive codification of Roman law and is considered one of the most important works of legal scholarship in the Western world. Ius commune: “Common Law”. The body of legal principles and traditions that were shared among the various European legal systems in the Middle Ages and early modern period. It was a product of the cultural and legal exchange that took place between the different regions of Europe as a result of the shared Latin language and the influence of the Roman legal tradition. The ius commune was not a specific legal code, but rather a set of principles and rules that were used as a basis for resolving legal disputes and guiding judicial decision-making. It played a central role in the development of European legal systems and has had a lasting influence on the legal systems of many countries around the world. Statutory law: Laws that are enacted by a legislative body, such as a parliament or congress. Statutory law is created through a process of lawmaking, which involves the proposal and adoption of laws by a legislative body. Typically written and published in a statutory code or collection of laws, which is organized and codified in a systematic manner. Statutory law is an important source of law because it provides a written and systematic framework for the regulation of society and helps to ensure consistency and predictability in the law. The Contracts (Rights of Third Parties) Act 1999: The Contracts (Rights of Third Parties) Act 1999 is a UK act of Parliament that gives third parties the right to enforce certain terms of a contract to which they are not a party. Prior to the Act, a third party generally did not have the right to enforce the terms of a contract to which they were not a party. The Act also sets out rules for determining which terms of a contract may be enforced by a third party, and for limiting the liability of parties to a contract to third parties. Under the Act, a third party may enforce a term of a contract if: 1. The contract expressly provides that the third party may do so 2. The term of the contract purports to confer a benefit on the third party Lecture 3: General Contract Law – General principles of contract law. Formation, content, agency. Reading: Chapter 11 (11.1 – 11.6) Questions:  What is a contract? A promise made to somebody else. Typically establishing rights and obligations on both parties. (A deed is a one-sided obligation and is viewed as another type of legal instrument.) Both parties will be held accountable for their respective promise, with some help from the state. Why do we need contracts? A contract is a powerful and necessary tool to counteract things that can, and will, go bad in business. - Risk mitigator: The contract protects both parties, handles and regulates commercial risk and explain how to deal with disputes/conflicts. - Efficiency enhancer: The contract records commitments (who does what and when) to avoid misunderstandings and reduce opportunism. It is also a tool for (re)negotiations. - Incentivize: The contract can make the other party see things your way. It can also align objectives and build trust over time. What does a good cycle of contract look like? - A perfectly formed contract: Mutual agreement, consideration and intention to create legal relations. - The contract contains obligations: Expressed by the parties and implied by the presumed intention and statute. - There is nothing that vitiate the contract and render it null and void by any party. - The contract is discharged: By performance, by agreement of the parties or because it is frustrated by an intervening event. What does a bad cycle of contract look like? - A perfectly formed contract: Mutual agreement, consideration and intention to create legal relations. - The contract contains obligations: Expressed by the parties and implied by the presumed intention and statute. - The contract is based upon a misrepresentation or mistake or coercion/illegality, which means that one party lacks capacity to enter into contract. - The contract is rendered void or voidable, depending on the nature of the vitiating factor. What happens when there is a breach of contract? - When one party fails to comply with the terms of the contract, the contract is breached. This trigger remedies. What are some various types of contracts? - Purchasing and selling commodities – sales law - Exporting and importing goods and services - Transport/carriage contracts - Pipe-line or refinery construction and maintenance - Distrubutorship agreements - Licensing agreements = intellectual property – patent, trade marks, know-how - Joint venture – cooperation agreements, contractual and equity - Going abroad with your product – agency and distributorship agreements, purchase or sale of a foreign company, establishing an affiliate or a subsidiary. - Payment and financial security All of these contracts have the same rules. Which rules govern contracts? - The contract itself: Based upon the fundamental principle of freedom of contract (exceptions in mandatory law, e.g. consumer protection and competition law) - Standard agreements: Individual standard terms and widely accepted standard terms (“Agreed documents”)  - National law: Civil codes such as Bürgerliches Gesetzbuch and Code Civile, The Swedish 1915 Contract act and the Swedish 1990 Sales act (movable property and intangible property is not real estate). - International law: CISG – UN Convention on Contracts for the International Sale of Goods. - Soft law: Internationally recognized principles – UNIDROIT principles of International Commercial Contracts, PECL, DCFR and other general principles in the field of contracts. Who can enter into agreements? - Subjects: Natural and legal persons - Any person who has legal capacity to enter into agreements: Under age persons need a power of attorney (a person who has the right to sign on behalf of somebody else) to enter into agreements. - Incorporations: Cannot act independently but only through intermediaries (agent-principal dilemmas). Can “live” forever. Explain the agent-principal constellation: - Agent: Enters into agreements with third parties on behalf of the principal or act in other ways in the interest of the principal. If the agent is entering into the agreement in the name of the principal, he is for instance called a trade agent. If the agent enters into agreement in his own name (but on behalf of the principal), he is called a commissioner. - Relationship between the agent and the principal: The agent has the mandate (or authority) to represent the principal. 1. Actual authority: the power that a person has to bind another party by their words or actions. Express – the authority is explicitly granted. Implied – the authority is inferred from the circumstances (inferred by virtue of a position held) or customary authority (the power or influence that a person has due to their social or cultural position). 2. Apparent authority (Ostensible authority): The principal’s conduct would lead a reasonable person in the third party’s position to reasonably believe that the agent was authorized to act, even if the principal and the purported agent had never discussed such a relationship. The power that a person appears to have based on the actions or statements of someone else. This type of authority can be created when a principal holds out an agent as having the authority to act on their behalf, or when a person represents themselves as having authority to act in a certain way. 3. Fiduciary duty: A fiduciary duty is a legal obligation to act in the best interests of another party. Fiduciary duties are typically imposed on people who hold a position of trust or confidence with regard to the welfare of others, such as agents acting on behalf of a principal. The nature of a fiduciary duty generally requires the fiduciary to put the interests of the other party before their own, to act with loyalty and good faith, and to disclose any conflicts of interest. Fiduciary duties are imposed by law and are intended to protect the vulnerable party from being exploited or taken advantage of by the fiduciary. Breach of a fiduciary duty can give rise to legal liability. (The principal must compensate the agent for acts within the mandate). - Relationship between the agent and the third party: Outside the mandate (no actual or apparent authority), the purported agent is liable to the third party for breach of the implied warranty of authority. The agent's actions and decisions bind the principal, and the principal is responsible for the actions of the agent as long as they are within the scope of the agent's authority. - Relationship between the principal and the third party: Merely a question of whether the purported contract is null and void (not legally binding or valid). The relationship between a principal and a third party is one in which the principal is the primary party to the relationship and the third party is an entity with which the principal has a business or other relationship. What shall be performed under the contract? The subject-matter of the contract, e.g. the promise. Under a contract, the parties agree to perform certain duties or obligations. These duties or obligations are typically set out in the terms of the contract and may include  things like delivering goods, providing services, paying money, or transferring ownership of property. The specific duties or obligations that are to be performed under a contract depend on the terms of the contract and the nature of the relationship between the parties. What happens in case of non-performance of the contract? If one party to a contract fails to perform their obligations under the contract, it is considered a breach of contract. The other party may have a number of remedies available to them as a result of the breach, depending on the jurisdiction and the specific terms of the contract. It is also possible for the parties to agree to alternative dispute resolution methods, such as arbitration or mediation, to resolve any disputes that arise from a breach of contract. Some possible remedies for a breach of contract include: - Damages: The non-breaching party may be able to recover damages from the breaching party to compensate them for any losses or harm that they suffered as a result of the breach. There are several types of damages that may be available, such as compensatory damages, which are intended to put the non-breaching party in the position they would have been in had the contract been performed, and consequential damages, which are damages that were foreseeable at the time the contract was formed. - Specific performance: In some cases, the non-breaching party may be able to seek an order requiring the breaching party to perform their obligations under the contract. This is known as specific performance. This remedy is typically only available if damages are not an adequate remedy and if the subject matter of the contract is unique or one of a kind. - Termination: The non-breaching party may have the right to terminate the contract if the breaching party's breach is considered material, or if it goes to the heart of the contract. This means that the non-breaching party is released from their own obligations under the contract and can sue for damages. - Restitution: In some cases, the non-breaching party may be able to seek restitution from the breaching party, which requires the breaching party to return any benefits that they received under the contract to the non- breaching party. What happens during the negotiation phase? The negotiation phase of a contract is the process of discussing and agreeing on the terms of the contract. During this phase, the parties involved in the contract communicate with each other to determine what they are willing to agree to and what they expect from the contract. The negotiation phase is an important part of the contract process, as it allows the parties to clearly understand the terms and conditions of the contract and to ensure that they are in alignment with their interests and goals. There are several steps that may occur during the negotiation phase of a contract: 1. Identifying the parties and the purpose of the contract: The parties to the contract and the purpose of the contract should be clearly identified at the outset of the negotiation process. 2. Determining the terms: The parties will negotiate and agree on the specific terms of the contract, such as the price, delivery terms, and any other conditions or obligations. 3. Drafting the contract: Once the terms have been agreed upon, a contract is typically drafted that outlines the terms of the agreement in a legally binding manner. 4. Reviewing and revising the contract: The parties will review the draft contract and make any necessary revisions. 5. Signing the contract: Once the parties are satisfied with the terms of the contract, they will sign it to indicate their acceptance of the terms and to make the contract legally binding. What is the Letter of Intent (LOI)? A letter of intent (also known as a "letter of interest") is a document that outlines the intentions of one party in relation to a business transaction or other agreement. It is not a legally binding document, but rather is a way for the party to express their interest in pursuing a particular course of action. A letter of intent is often used as a precursor to a more formal agreement, such as a purchase agreement or a partnership agreement. It allows the parties to establish a mutual understanding and to begin negotiations without committing to a binding agreement. However, it is important to be aware that a letter of intent is not a substitute for a legally binding contract, and it may not provide the same level of protection as a formal agreement.  What are conditions precedent clause? A conditions precedent clause is a provision in a contract that sets out certain events or conditions that must be satisfied before the contract becomes effective or before certain obligations under the contract become due. Conditions precedent are often used to protect the interests of one or both parties to the contract, or to ensure that certain conditions are met before the contract is fully executed. Examples are antitrust/competition law matters, consent of a regulatory authority, third-party conditions precedent, documents to be handed over. Two types of conditions precedent clauses: 1. Express conditions precedent: Conditions that are specifically set out in the contract and must be satisfied before the contract becomes effective or certain obligations become due. 2. Implied conditions precedent: Conditions that are not specifically set out in the contract, but that are implied by law or by the nature of the contract. What does pacta Pacta sunt servanda mean? Pacta sunt servanda is a Latin phrase that means "agreements must be kept." It is a principle of contract law that requires parties to a contract to fulfill their obligations under the contract. The principle of pacta sunt servanda is based on the idea that contracts are an essential part of the legal system and that they provide a framework for the orderly exchange of goods, services, and other legal obligations. Explain the formalities around the formation of a contract: There are several formalities that are often followed when forming a contract. These formalities can vary depending on the jurisdiction and the type of contract being formed. However, some common formalities include: - Offer and acceptance: There must be an offer made by one party and an acceptance of that offer by the other party. The offer must be clear and definite, and the acceptance must be unconditional. Offer: A proposal for concluding a contract constitutes an offer if it is sufficiently definite and indicates the intention of the offeror to be bound in case of acceptance. Acceptance: Full and unconditional acceptance by the offeree. - Consideration: There must be something of value that is exchanged between the parties. This can be a payment of money, a promise to do something, or a promise not to do something. - Capacity: The parties must have the legal capacity to enter into a contract. This means that they must be of legal age and have the mental capacity to understand the terms of the contract. - Legality: The contract must not be for an illegal purpose or involve illegal activities. Intention to create legal relations, distinguishes contracts from social undertakings. Certainty of terms, A court must be able to enforce the contract. - Writing: Some contracts must be in writing to be enforceable. For example, contracts involving the sale of real estate or contracts that cannot be performed within one year must be in writing. A written contract is an important evidence tool. - Signatures: The parties must sign the contract to show their agreement to its terms. When is a contract concluded? CISG Article 16: Until a contract is concluded an offer may be revoked if the revocation reaches the offeree before he has dispatched an acceptance”. An acceptance is defined as an expression of the buyer's agreement to be bound by the contract on the terms set out in the offer. An acceptance must be unconditional and must not contain any modifications or additional terms. If an acceptance contains additional terms, it is considered a counteroffer, which the seller can either accept or reject. When can you revoke offers and withdrawals?  An offer is a statement of the offeror's willingness to enter into a contract on certain terms. An offer can generally be revoked at any time before it is accepted by the offeree. This means that the offeror has the right to withdraw the offer and is no longer bound to the terms of the contract. Until a contract is concluded an offer may be revoked if the revocation reaches the offeree before he has dispatched an acceptance. There are some exceptions to this general rule. For example, an offer may become irrevocable if the offeree relies on the offer and incurs costs or takes other action in reliance on the offer. In this case, the offeror may be estopped from revoking the offer. An offer may also become irrevocable if it is made in the form of an option contract. An option contract is a contract in which the offeror agrees to keep the offer open for a certain period of time in exchange for the payment of a consideration (such as a fee) by the offeree. If the offeree pays the consideration and the offeror fails to honor the option, the offeror may be required to compensate the offeree for any damages resulting from the breach. An offer cannot be revoked if it indicates, whether by stating a fixed time for acceptance or otherwise, that it is irrevocable; or if it was reasonable for the offeree to rely on the offer as being irrevocable and the offeree has acted in reliance on the offer. An acceptance may be withdrawn if the withdrawal reaches the offeror before or at the same time as the acceptance would have become effective. What happens when the offeree rejects the offer? An offer, even if it is irrevocable, is terminated when a rejection reaches the offeror. If the offeree rejects the offer but later changes their mind and wants to accept it, they must make a new acceptance of the offer. The offeror is not required to honor the original offer if it has already been rejected. How does acceptance of offers work? There are several ways that an acceptance can be communicated to the offeror. In some cases, the offer may specify how acceptance must be communicated, such as by signing a written contract or by mailing a letter of acceptance. In other cases, the offer may not specify how acceptance must be communicated, in which case the offeree can choose the method of acceptance. An acceptance is generally effective when it is communicated to the offeror. However, there are some exceptions to this rule. For example, if the offer specifies that acceptance must be communicated in a certain way, such as by mail, the acceptance is not effective until it is received by the offeror. Silence or inactivity does not itself amount to acceptance, hence is activity important. An acceptance is not effective if the indication of assent does not reach the offeror within the time he has fixed or, if no time is fixed, within a reasonable time, due account being taken of the circumstances of the transaction, including the rapidity of the means of communication employed by the offeror. An oral offer must be accepted immediately unless the circumstances indicate otherwise. If, by virtue of the offer or as a result of practices which the parties have established between themselves or of usage, the offeree may indicate assent by performing an act, such as one relating to the dispatch of the goods or payment of the price, without notice to the offeror, the acceptance is effective at the moment the act is performed, provided that the act is performed within the period of time laid down above. What is a counteroffer? A reply to an offer which purports to be an acceptance but contains additions, limitations or other modifications is a rejection of the offer. However, a reply to an offer which purports to be an acceptance but contains additional or different terms which do not materially alter the terms (Additional or different terms relating, among other things, to the price, payment, quality and quantity of the goods, place and time of delivery, extent of one party’s liability to the other or the settlement of disputes are considered to alter the terms of the offer Materially) of the offer constitutes an acceptance, unless the offeror, without undue delay, objects orally to the discrepancy or dispatches a notice to that effect. A counteroffer is a new offer made in response to an initial offer, usually in negotiations over the terms of a contract. A counteroffer typically includes changes or modifications to the terms of the original offer, and it may be made in order to try to reach a more favorable agreement. If the initial offer is rejected and a counteroffer is  made, the person who made the initial offer has the option to accept the counteroffer, reject it, or make another counteroffer. Explain the acceptance period: A period of time for acceptance fixed by the offeror in a telegram or a letter begins to run from the moment the telegram is handed in for dispatch or from the date shown on the letter or, if no such date is shown, from the date shown on the envelope. A period of time for acceptance fixed by the offeror by telephone, telex or other means of instantaneous communication, begins to run from the moment that the offer reaches the offeree.Official holidays or non-business days occurring during the period for acceptance are included in calculating the period. However, if a notice of acceptance cannot be delivered at the address of the offeror on the last day of the period because that day falls on an official holiday or a non-business day at the place of business of the offeror, the period is extended until the first business day which follows. Explain late acceptance: A late acceptance is nevertheless effective as an acceptance if without delay the offeror orally so informs the offeree or dispatches a notice to that effect. An acceptance may be withdrawn if the withdrawal reaches the offeror before or at the same time as the acceptance would have become effective. Explain late acceptance that should have arrived on time: If a letter or other writing containing a late acceptance shows that it has been sent in such circumstances that if its transmission had been normal it would have reached the offeror in due time, the late acceptance is effective as an acceptance unless, without delay, the offeror orally informs the offeree that he considers his offer as having lapsed or dispatches a notice to that effect. In what circumstances are a contract not formed? There are a few circumstances in which a contract may not be considered legally binding. These include: 1. Lack of capacity: One or both parties may lack the legal capacity to enter into a contract, such as being a minor or being mentally incapacitated. 2. Lack of consideration: A contract must involve an exchange of value between the parties. If one party does not receive anything in return for their promise, the contract may not be enforceable. 3. Lack of intention to create a legal relationship: If the parties do not intend for the agreement to be legally binding, a contract may not be formed. 4. Unenforceable terms: A contract may not be enforceable if it contains terms that are illegal or against public policy. 5. Fraud: If one party uses fraud or deceit to induce the other party to enter into a contract, the contract may be voidable. 6. Mistakes: Must be fundamental and operative to avoid the consensus ad idem. 7. Misrepresentation: If one party makes a false statement that influences the other party's decision to enter into the contract, the contract may be voidable. 8. Duress: If one party is forced or threatened to enter into a contract against their will, the contract may be voidable. 9. Undue influence: when one party takes advantage of their position of power or authority over another party in order to persuade them to enter into a contract. The party who exerts undue influence may use their influence in a manipulative or coercive manner to get the other party to agree to terms that are not in their best interests. Other: CISG: The United Nations Convention on Contracts for the International Sale of Goods (CISG) is a treaty that sets out the legal framework for the sale of goods between parties from different countries. The CISG applies to contracts for the sale of goods that are made between parties from different countries, provided that both countries are parties to the CISG. The CISG has been adopted by over 80 countries around the world, including many countries in Europe, Asia, and South America. The CISG contains a number of provisions that govern the formation of contracts, including rules on offer and acceptance, the creation of contract terms, and the rights and obligations of the parties. It also contains provisions on topics such as the passing of risk, delivery of the goods, and payment. The CISG is intended to provide a uniform and predictable legal framework for international sales contracts, which can help to reduce the risk of disputes and facilitate international trade. Principle of contract. CISG Article 16. In contract law, the principle of contract refers to the set of rules and legal principles that govern the formation, performance, and enforcement of contracts. Article 16 of the CISG is titled "Offer and Acceptance" and provides the rules for determining when an offer has been made and when an acceptance of that offer has been given. PECL: The Principles of European Contract Law (PECL) are a set of rules that aim to provide a uniform and consistent framework for contract law throughout the European Union (EU). The PECL are not legally binding, but they are widely respected and often referred to by courts and legal scholars in the EU. o Article 2:101: Concluded – The parties intend to be legally bound and they reach a sufficient agreement without any further requirement. "Formation of the Contract" and it deals with the requirements for the formation of a contract. According to this article, a contract is formed when: - An offer is made by one party (the "offeror") and accepted by the other party (the "offeree"). - The acceptance is made in conformity with the terms of the offer and the acceptance is communicated to the offeror. - The parties have the intention to create legal relations - The parties have reached a sufficient degree of consensus on the terms of the contract. The article also specifies that silence or inactivity on the part of the offeree does not constitute acceptance, unless it is reasonable for the offeror to assume that the offeree's silence or inactivity constitutes acceptance. o Article 2:103: Sufficient - If the terms have been sufficiently defined by the parties so that the contract can be enforced, or can be determined under these Principles. Article 2:103 of the Principles of European Contract Law (PECL) is titled "Revocation of the Offer" and it deals with the rules for revoking an offer. According to this article, an offer may be revoked at any time before it is accepted, unless the offeror has made a commitment not to revoke the offer or the offer was made in a format that cannot be revoked, such as in a sealed bid. The article also specifies that an offer is considered revoked if the offeror dies or becomes incapacitated before the offer is accepted. However, if the offeree has started to perform their obligations under the contract or has incurred expenses in reliance on the offer, the offeror may be required to compensate the offeree for any damages they suffer as a result of the revocation. This is known as the "doctrine of reliance." UPICC: The Uniform Practices for International Commercial Contracts (UPICC) are a set of guidelines that provide recommendations for the negotiation and drafting of international commercial contracts. The UPICC were developed by the International Institute for the Unification of Private Law (UNIDROIT) and are based on the principles of good faith, fair dealing, and the reasonable expectations of the parties. The UPICC are not legally binding, but they are widely recognized and respected as a helpful guide for parties who are negotiating and drafting international commercial contracts. They are intended to provide a common set of practices and standards that can be used to facilitate the negotiation and drafting process and to reduce the risk of misunderstandings and disputes. The UPICC cover a wide range of topics, including offer and acceptance, the formation of contract terms, and the rights and obligations of the parties. UNIDROIT: The International Institute for the Unification of Private Law (UNIDROIT) is an intergovernmental organization that was established in 1926 to promote the unification and harmonization of private law, including contract law, throughout the world.  Rendered void: A contract or agreement may be rendered void if it is found to be legally invalid or unenforceable. This can occur for a variety of reasons, such as if the contract was formed under duress or undue influence, if it contains illegal or unenforceable terms, or if one of the parties lacks the legal capacity to enter into the contract. If a contract is void, it is as if the contract never existed and the parties are not bound by its terms. This means that the parties are not required to perform their obligations under the contract and they are not entitled to any remedies for breach of contract. Voidable: A contract or agreement may be voidable if it is found to be legally invalid or unenforceable, but only under certain circumstances. A voidable contract is one that is initially valid and enforceable, but can be cancelled or set aside by one of the parties if certain conditions are met. A contract may be voidable if it was formed under duress, undue influence, or misrepresentation. In these cases, the party who was subjected to the duress, undue influence, or misrepresentation may have the option to void the contract or to seek damages for any losses they have suffered as a result of the contract. A contract may also be voidable if one of the parties lacks the legal capacity to enter into the contract, such as if one of the parties is a minor or is mentally incapacitated. In these cases, the party who lacks capacity may have the option to void the contract or to seek damages for any losses they have suffered as a result of the contract. If a contract is voidable, it remains in effect until it is cancelled or set aside by one of the parties. However, the party who has the option to void the contract may choose not to do so, in which case the contract remains valid and enforceable. DCFR: The Draft Common Frame of Reference (DCFR) is a comprehensive set of rules for European private law that was developed by the European Law Institute (ELI) and the Max Planck Institute for Foreign and International Private Law. The DCFR was designed to provide a common frame of reference for the interpretation and application of private law throughout the European Union (EU). The DCFR is divided into several parts, covering a wide range of topics including contracts, torts, property, and family law. It includes both general principles and specific rules that can be used to help resolve legal disputes and to promote legal certainty and predictability in cross-border transactions within the EU. The DCFR is not legally binding, but it is widely respected and often referred to by courts and legal scholars in the EU as a helpful guide for interpreting and applying private law. Pactum turpe: “Illegitimate agreement”. A legal term used to describe a contract or agreement that is considered morally or legally wrong and therefore void or unenforceable. Pactum turpe can refer to agreements that are made for an illegal or fraudulent purpose, or that are against public policy. In some legal systems, pactum turpe is considered a form of void contract, which means that it is not legally binding and the parties are not required to perform their obligations under the agreement. In other legal systems, pactum turpe may be considered a form of voidable contract, which means that it is initially valid and enforceable, but can be cancelled or set aside by one of the parties if certain conditions are met. Consensus ad idem: “Meeting of the minds”. A legal term used to describe the mutual understanding and agreement of the parties to a contract. In order for a contract to be enforceable, it is necessary for the parties to have reached a sufficient degree of consensus on the terms and conditions of the contract. Null and void: The term is often used to describe a contract, agreement, or other legal document that is no longer in force or has been terminated. There are several reasons why something might be null and void, including if it was not properly executed or if it violates the law or public policy. A contract may also be declared null and void if one of the parties was not competent to enter into the contract, such as if they were a minor or under the influence of drugs or alcohol. If a contract is null and void, the parties are not required to fulfill their obligations under the contract, and any rights or obligations that arose from the contract are extinguished. Culpa in contrahendo: “Pre-contractual liability”. A legal concept that refers to the liability of one party for damages that result from negotiations leading up to the formation of a contract. This liability arises when one party to the contract causes damages to the other party by acting negligently or in bad faith during the pre- contractual negotiations. Culpa in contrahendo is a way for parties to recover damages that result from pre- contractual negotiations, even if a formal contract is never formed. In order for culpa in contrahendo to apply, the following elements must be present: - Pre-contractual negotiations: There must be negotiations between the parties  that are intended to lead to the formation of a contract. - Negligence or bad faith: The party seeking to recover damages must show that the other party acted negligently or in bad faith during the negotiations. - Damages: The party seeking to recover damages must have suffered actual damages as a result of the other party's conduct. “Memorandum of Understanding (MoU)”: A document that outlines the terms of an agreement between two or more parties. It is a nonbinding agreement that sets out the intentions of the parties and the general terms of the agreement, but does not create legally enforceable obligations. An MoU is often used to establish a general understanding or framework for further negotiations or cooperation between the parties. Letters of comfort: Letters of comfort are nonbinding letters that are issued by a company or individual to provide assurance or comfort to another party. They are not legally enforceable, but rather are intended to provide assurance that a certain course of action will be taken or that a certain outcome will be achieved. Lecture 4: General Contract Law – Privity of Contract Reading: p. 243, Lord Goff’s opinion (White v Jones) Questions: What is meant by the doctrine of privity of contract? The doctrine of privity of contract is a legal principle that holds that only parties to a contract have the right to enforce the terms of that contract. This means that third parties, who are not a party to the contract, do not have the legal right to enforce the terms of the contract or to seek remedies for any breaches of the contract. The doctrine of privity of contract is based on the idea that a contract is a private agreement between the parties to the contract, and that the terms of the contract should only bind those parties. What are the two aspects of the doctrine of privity of contract? 1. A contract can only be enforced by parties to the contract: This means that only parties to the contract have the legal right to seek remedies for any breaches of the contract. Third parties do not have the legal right to enforce the terms of the contract or to seek remedies for any breaches. 2. A contract can only create rights and obligations between the parties to the contract: This means that the terms of the contract only bind the parties to the contract, and do not create legal rights or obligations for third parties. The doctrine of privity of contract prevents contracting parties from imposing burdens or conferring rights on third parties to the contract. What are the differences between the doctrine of privity of contract in English (common) law and in Swedish law? The doctrine of privity of contract is a legal principle that applies in both English (common) law and Swedish law. However, there are some differences between the way that the doctrine is applied in these two legal systems. In English (common) law, the doctrine of privity of contract is a well-established principle that has been developed over many years through case law. The doctrine holds that only parties to a contract have the right to enforce the terms of that contract, and that third parties do not have the legal right to enforce the terms of the contract or to seek remedies for any breaches. In Swedish law, the doctrine of privity of contract is also recognized, but it is not as strictly applied as it is in English (common) law. Swedish law allows for some limited exceptions to the doctrine of privity of contract, which allow third parties to enforce the terms of a contract or to seek remedies for breaches in certain circumstances. For example, Swedish law allows for the transfer of rights and obligations under a contract to a third party, provided that the parties to the contract agree to the transfer and that it is not contrary to the nature  of the contract. Swedish law also allows for third parties to enforce the terms of a contract if they can show that they were intended to benefit from the contract. Common law doctrine privity of contract – A third party, i.e a person who is not a party to a contract, cannot be (1) subject to obligations arising from the contract or (2) acquire rights under that contract – even if the contract expressly or impliedly states otherwise. While (1) is a universal rule, there are many exceptions to (2), eg suing in tort for negligence; no contract between plaintiff and defendant, but defendant must owe the plaintiff a duty of care. Summarize Beswick v Beswick; Beswick sold a business to his nephew in return for the nephew’s promise to pay him a certain amount a week for the rest of his life and thereafter a certain amount to Beswick’s widow for the rest of her life. The nephew ceased making payments to the widow shortly after Beswick’s death. The widow sued the nephew both (1) in her personal capacity, and (2) as administratrix of her late husband’s estate. The Court held that: (1) In her own name she has no right to sue because she is a stranger to the contract between her late husband and the nephew; no privity of contract (2) But she has the right as administratrix of her husband’s estate to require the nephew to perform his obligation under the agreement Summarize White v Jones; Mr Barratt, having disinherited his two daughters, changed his mind and instructed his solicitor, Mr Jones, to draft a new will—thereby revoking the old one—to include legacies of ￡9,000 to each daughter. Daughters about this: Caroline White also spoke to Mr Jones about her father’s wishes. Testator’s solicitor negligently delayed preparing the new will and the testator, Mr Barratt, died before the fresh will was prepared. Because of the delay daughters received nothing. Lord Goff’s opinion: No liability in contract because there is no contract between the solicitor and the disappointed beneficiary. English law does not recognize ius quaesitum tertio—contract cannot confer rights on a third party. Explain the common law concept of consideration; Consideration is a common law concept that is an essential element of a legally binding contract. Consideration refers to the value or benefit that each party to a contract receives in exchange for their promise to perform under the contract. In other words, consideration is the "price" that each party pays for the other party's promise.  For a contract to be enforceable, there must be mutual exchange of consideration between the parties. This means that each party must promise to do something or give something of value in exchange for the other party's promise. For example, if Party A agrees to sell a car to Party B for $1,000, Party A is providing the car as consideration for Party B's promise to pay $1,000. Party B, in turn, is providing the $1,000 as consideration for Party A's promise to transfer ownership of the car. The concept of consideration is important because it ensures that both parties to a contract have a stake in the performance of the contract and are motivated to fulfill their obligations. Consideration also helps to distinguish a legally binding contract from a mere gift or promise, which are not enforceable because there is no exchange of consideration. Must be sufficient, of value in the eyes of the law. Past consideration is invalid, since it is not provided in response to the promise. A third party has not provided any consideration. What is the function of consideration in the common law? The concept of consideration serves several important functions in the common law: 1. It ensures that both parties to a contract have a stake in the performance of the contract and are motivated to fulfill their obligations. If each party has given something of value in exchange for the other party's promise, they will be more likely to follow through with their own promises. 2. It helps to distinguish a legally binding contract from a mere gift or promise, which are not enforceable because there is no exchange of consideration. 3. It helps to ensure that contracts are fair and reasonable, as both parties must offer something of value in exchange for the other party's promise. 4. It helps to clarify the terms of the contract and the obligations of the parties, as the exchange of consideration serves as a clear indication of what each party is agreeing to. Is there a relationship between privity and consideration? While privity and consideration are both important in the law of contracts, they serve different functions. Privity determines who has the legal right to enforce the terms of a contract, while consideration is an essential element of a legally binding contract and ensures that there is mutual exchange of value between the parties. Re: common law, name some "exceptions" to the privity doctrine; There are several exceptions to the doctrine of privity of contract in common law, which allow third parties to enforce the terms of a contract or to seek remedies for any breaches of the contract in certain circumstances. - Agency: Not a true exception to privity since the principal becomes a party to the contract. An agent can make contract on behalf of a principal within the scope of his (express and implied) authority. - Assignment: Party B can assign her contractual rights against party A to a third-party C. C can then enforce those rights as if she had been the original contracting party B. Assignment can be excluded by a non- assignment clause in the original contract. Assignee (Party C) of a contractual right takes subject to “excising equities” – C is in no better position than the original contractual right holder (Party B). Only rights, no duties can be assigned. In a sales contract, the seller can only assign her right to receive payment.  A party to a contract may assign their rights under the contract to a third party, provided that the assignment is not prohibited by the terms of the contract and the nature of the rights being assigned. This allows the third party to enforce the terms of the contract as if they were a party to it. - Tort of negligence: (White v Jones) In the law of tort, negligence is a type of civil wrong that occurs when a person fails to take reasonable care to prevent foreseeable harm to others. Negligence can take many forms, including failing to take appropriate precautions, failing to properly maintain equipment or property, or failing to properly supervise others. How does the doctrine of privity re-appear in our seminar on NDA's? In the context of a non-disclosure agreement (NDA), the doctrine of privity of contract may be relevant in determining whether a third party can enforce the terms of the NDA or seek remedies for any breaches of the NDA. For example, if an NDA is entered into between two parties and a third party later discovers that one of the parties has breached the NDA, the third party may not have the legal right to enforce the NDA or to seek damages for the breach, depending on the specific terms of the NDA and the applicable laws. However, there are certain exceptions to the doctrine of privity of contract that may allow a third party to enforce the terms of an NDA or to seek remedies for any breaches of the NDA in certain circumstances. For example, if the NDA is made for the benefit of a third party, or if the third party is a party to an assignment of rights under the NDA, they may have the legal right to enforce the NDA or to seek remedies for any breaches of the NDA. What are the effects of the Contracts (Rights of Third Parties) Act 1999? The Contracts (Rights of Third Parties) Act 1999 is an act of the Parliament of the United Kingdom that allows third parties to enforce the terms of a contract to which they are not a party. The act provides that a third party may have the right to enforce the terms of a contract if: 1. The contract expressly provides that the third party has the right to enforce the contract; or 2. The contract purports to confer a benefit on the third party. 3. The third party must be expressly identified in the contract by name, as a member of a class or as answering a particular description but need not be in existence when the contract is entered into. The act applies to contracts entered into on or after its date of coming into force (i.e., May 11, 2000) and only applies to contracts governed by the laws of England and Wales or Northern Ireland. The effect of the act is to create a statutory exception to the principle of privity of contract, which holds that only parties to a contract have the right to enforce the terms of the contract. The act allows certain third parties to enforce the terms of a contract and to seek remedies for any breaches of the contract, provided that they meet the requirements set out in the act. Overall, the Contracts (Rights of Third Parties) Act 1999 expands the rights of third parties to enforce the terms of a contract and serves to protect the interests of third parties in certain situations.  Privity of contract and third parties- Generally prevents contracting parties from either: 1. Imposing burdens or 2. conferring rights on third parties to the contract. Why is rule 1. Applicable in all legal systems? Why is rule 2 not universally applicable? As for the distinction between the benefit and burden sides of the doctrine, the rule that prohibits contracting parties from imposing burdens on third parties is generally applicable in all legal systems because it is seen as a fundamental principle of contract law. This rule is based on the idea that individuals should not be held responsible for obligations that they have not agreed to. The rule that prohibits contracting parties from conferring rights on third parties, on the other hand, is not universally applicable. Some legal systems, such as the common law system, do recognize the concept of "privity of contract" and apply the doctrine to both the benefit and burden sides. Other legal systems, however, do not recognize the doctrine of privity of contract at all, or only apply it to the burden side. Other: Plaintiff: A person or party who brings a legal action or lawsuit against another person or party in a court of law. The plaintiff is the party that initiates the legal proceedings and is seeking a remedy or relief from the court. In a civil lawsuit, the plaintiff is typically seeking monetary damages or some other form of relief, such as an injunction or declaratory judgment. In a criminal case, the plaintiff is typically a government entity, such as a prosecutor or district attorney, who is seeking to punish the defendant for a crime. Defendant: The person or party against whom the legal action is brought is known as the defendant. Ius quaesitum tertio: "A right sought by a third party." A legal term that refers to a right or claim that is acquired by a third party through the transfer of rights and obligations under a contract. In some legal systems, including those based on the Napoleonic Code, the doctrine of ius quaesitum tertio allows for the transfer of rights and obligations under a contract to a third party, provided that the parties to the contract agree to the transfer and that it is not contrary to the nature of the contract. This allows the third party to enforce the terms of the contract or to seek remedies for any breaches. Third party beneficiary: A third party beneficiary is a person who is not a party to a contract but who is intended to benefit from the contract. In common law, a contract may be made for the benefit of a third party, even if the third party is not a party to the contract and has not provided any consideration. For example, if Party A enters into a contract with Party B to build a house, and Party A specifies that the house must be built to certain specifications for the benefit of Party C, Party C may be a third party beneficiary of the contract. In this case, Party C may have the legal right to enforce the terms of the contract and to seek remedies for any breaches of the contract, even though they are not a party to the contract. The doctrine of third party beneficiaries is an exception to the principle of privity of contract, as it allows a third party to enforce the terms of a contract and seek remedies for any breaches of the contract, even if they are not a party to the contract. The rights of a third party beneficiary are subject to the terms of the contract and may be limited or extinguished if the contract is amended or terminated. Traditional view, Promisee is suing for its own loss - Jackson v Horizon Holidays 1 WLR 1468: Jackson v Horizon Holidays 1 WLR 1468 is a leading case in English tort law that considered the liability of a holiday tour operator for injuries suffered by a tourist during a holiday package tour. In this case, Mr. Jackson booked a holiday package tour with Horizon Holidays, which included flights, accommodation, and excursions. During the tour, Mr. Jackson was injured when he fell off a camel while on an excursion arranged by Horizon Holidays. Mr. Jackson sued Horizon Holidays for damages, alleging that the company was negligent in arranging the excursion and in failing to adequately warn him of the risks involved.